Social Media

Facebook's New Advertising Strategy Is Brilliant and Unexpected

Facebook and Google get compared a lot these days, but with its new advertising strategy, Facebook is adapting Google’s ad strategy to its social media.

Improving advertising on the popular social network is not a new or particularly innovative idea. Still the transition from advertising as a message-delivering medium to a platform for social sharing is a radical departure for Facebook. It could be the Facebook advertising solution that turns advertising partners (brands) into better social media communicators and gets Facebook members to start recommending and sharing advertisers as much as they do they latest cat video.

As for the Google comparison. Recall that in the early days, Google had a choice: Take money from advertisers for higher search rankings or ignore such offers and focus on making its search engine the best it could be.

Google at first didn't know how it would make money. Founders Larry Page and Sergey Brin figured that if they built a better mousetrap, the money would eventually flow. And it did.

Like Google, Facebook didn't invent a category, it refined it. Friendster and MySpace predated Facebook just like Yahoo and Alta Vista came before Google. Like Google, Facebook figured that if it got enough people on board and continually improved its social network, eventually it would figure out a way to make money.

Facebook's overtures at first were clumsy. Beacon, the advertising platform Facebook introduced in 2007, informed all your friends when you made potentially embarrassing purchases or rentals on Blockbuster and other retail partners — and was eventually shuttered. Since then, Facebook seems content cashing in on its huge user base via display advertising.

Now, however, Facebook’s ad strategy is becoming clear. And it's not only brilliant, it's unexpected. Facebook's strategy, like Google's, is to not only improve its network and experience, but improve the advertising as well. Now, that's not so clever, admittedly. The really interesting part is the way Facebook plans to improve it: by making brand Pages better.

Why? Facebook doesn't make a dime on any of the Pages set up by advertisers. As a marketer, you could do quite well for yourself by running a brand Page and never buying a single ad. But you could only do so well. The reason you will have to buy ads on Facebook goes to the heart of why you need to advertise in the first place.

A few years ago, I wrote a story about the marketing for Star Wars: Episode III — Revenge of the Sith the last movie (by release date, not chronologically) in the Star Wars franchise. I was genuinely baffled as to why Lucasfilm was putting such a heavy advertising push behind the movie. I mean, after all, didn't everyone who cared already know that the movie was coming out?

Jim Ward, Lucasfilm's vice president of marketing at the time, though, told me the stakes were huge for that movie. If the studio did absolutely no advertising, it would likely lose $110 million or so in box office returns. "What we need to do is go beyond the core audience, not only from a box office perspective but from a brand-management perspective," he told me at the time.

In other words: You don't need to let Star Wars fans know that a Star Wars movie is coming out, but you do need to target all those millions of people who are on the fence about Star Wars or are too young to remember it.

The same is true for any brand that really wants to grow. You will get only so far keeping your base happy. What you need to do is reach beyond them.

It turns out that approaching friends of that base may be the best way to do this. Why? Think back to the last time a friend convinced you to take a flyer on a new product or maybe made you think of an old brand in a new way. For instance, I have a friend who is a total Mac-head who surprised me last year when he said that Windows 7 was as good as the Mac OS. Movies are another good example. Have you ever written off a new movie only to be completely turned around when a friend told you it was actually really good? (Of course, this cuts the other way, too.)

That's the thinking behind two new announcements Facebook is making this week. One is a new ad unit. The other is a set of metrics that will help administrators create better brand Pages.

The combination of the two reveals where Facebook's thinking is going. Facebook is putting pressure on advertisers to create better content for their brand Pages. If they do, those brands will have a better chance of winning over friends of fans either by advertising or by creating something viral. It's a cycle that has the potential to redefine the way we interact with brands. From now on, brands will be friends or friends of friends rather than spammers trying to bombard your consciousness.

Social media is still new, but so was search once. While figuring out how to make money off of search seems obvious in retrospect, it clearly wasn't at the time. In the same way, someday we'll look back at how Facebook invented social media advertising and wonder why no one thought of it sooner.

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